Analysts see considerable value in BlackBerry's secure network, BB10 operating system and patents, but little in its smartphone business

Potential bidders for BlackBerry are only interested in parts of the business, concluding that the firm's smartphones, such as the recent Q10 and Z10, have little or no value, reports say.

Bidders from private equity firms are interested mostly in the BB10 operating system that powers the new BlackBerry smartphones, along with selected patents related to keyboards, unnamed sources familiar with the potential sale told Reuters.

Reuters and others reported that Fairfax Financial Holdings, which owns 10% of BlackBerry, has approached several large Canadian investment funds about taking BlackBerry private. Fairfax is based in Toronto, near BlackBerry's Waterloo, Ontario headquarters.

The lack of interest in buying all of publicly-traded BlackBerry, valued at about $5.4 billion recently, primarily stems from the challenges facing the company in a very competitive smartphone environment. BlackBerry must compete against top selling Apple and Android-based devices as well as smartphones running Microsoft's Windows Phone, which recently passed BlackBerry to hold the third place ranking in smartphone market share, according to Gartner and IDG.

For all of 2013, Android is expected to grab a 75% share of the global smartphone market, versus 17% for Apple's iOS-based phones, 3.9% for Windows Phone and 2.7% for BlackBerry, IDC said.

Several technology analysts said they were somewhat surprised by the apparent lack of interest in all of BlackBerry, arguing that just five weeks after BlackBerry formed its special committee, it's too early to give up hope for a comprehensive sale.

BlackBerry's wireless email devices created the foundations for the smartphone revolution in 1999, seven years before the first iPhone launched in 2006. But BlackBerry's market share has fallen from $84 billion in 2008 to $5 billion today. In addition, sales of the new Q10 and Z10 haven't met expectations, analysts noted.

"I'm surprised there are not takers for BlackBerry," said Ezra Gottheil, an analyst at Technology Business Research.

"The patents and platform are worth quite a bit, but I also think the device business could be run at a profit," Gottheil said. "BlackBerry tried to follow Apple and then Android into the consumer space, but I think there is a place for a business device, one that is more secure, easier to use for email and has lower network costs."

Carolina Milanesi, a Gartner analyst, said the "best fit for a buyer should come from the enterprise world." Such a vendor would be interested in BlackBerry's services and hardware businesses, and could capitalise on the BlackBerry secure network as well, she said.

"I think the lack of news about a buyer is not all about BlackBerry not being attractive, but about the complexity of today's market and what it takes to be competitive," Milanesi added.

Analysts have said the BlackBerry's services business, which includes the secure network, could be worth up to $4.5 billion alone, while a number of BlackBerry-related patents could be worth up to $3 billion. In addition, BlackBerry has $3 billion in cash and investments.

All those elements combined could make the full company worth up to $10.5 billion, well above BlackBerry's $5.4 billion market value. Financial analysts have said the smartphones have little value to any buyer, and that shutting down that operation could cost $2 billion.

BlackBerry's move to create the special committee marked a formalisation of an informal process started more than two years ago to take the company private, analysts noted.